Can't see the forest for the trees

Learning to control our spending through budgeting requires an attention to detail that many of us are not in the habit of exerting. Watching every dime, keeping receipts, records, and analysing each of them is not always fun. In our effort to curb we watch unit pricing, sales, and bemoan our morning stop for coffee. All that is a good start to examine and change any wasteful or less than useful habits. The downside is that we can become so absorbed with the details that we lose sight of the big picture and begin to be hyper vigilant in the little things, making ourselves miserable while missing the bigger picture.

The old expression for this is "can't see the forest for the trees"

More than once I have caught myself figuring what sacrifice I can make to save another $10 and have been told I am able to squeeze Lincoln until he squeals. That's good but there are other times when I have missed big things while I concentrated on the details.

This is where goals become such an important first step needed before making a budget. Since I wrote the post titled Who wants to be a Millionaire? it really got me thinking...

Most of us want and hope for the same things at least as the basics:

• An education
• A home
• A family

Our approach for the most part has been as follows:

1. Graduate from high school
2. Go into debt getting an education if scholarships have not been received
3. Rent a place to live
4. Get married
5. Have children (for 30% of women number 4 and 5 are reversed)
6. Buy a house
7. Put kids through college or let them go into debt
8. Struggle, remain in debt, or work on getting out of debt for 30 years
9. Have a midlife crisis
10. Save money (or not) and long for retirement
11. Retire

All these steps are taken to achieve those 3 goals mentioned above.

What if we were to change the order of the steps to the following? Of course, it would have to be modified to the individual for we all know that when love enters the door all else takes 2nd priority whether we intend for it to  or not:

• Begin saving money while living at home as discussed in Who wants to be a Millionaire?
• Prepare for college by achieving academic excellence
• Attend higher education using scholarships and/or saved money and parental assistance acquiring no debt
• Get married
• Work as a two income family to prepare for the purchase on a home in cash.  Use the income of one person to save and the second to live on thus learning to live on a single income.
• Have children.  One parent could stay home avoiding all daycare costs.  A home business could also be developed
• Home school child or any 2nd parent income for private education.  Why not put academic excellence for our children all through their years instead of waiting until they are 18?
• (Remember the house was paid off before having children so all that is needed is for food, clothing, and transportation which should be manageable on one income)
• Any 2nd income could be dedicated toward children's early and secondary education or savings for the future. 

Yes, this is an idea and not a common plan  or experience so statistical verification is unavailable.  However, I have heard so many times:

• We have to have two incomes to live
• We can't afford private school

Housing is the single biggest expense for most of us. How we choose to handle it can easily become the dictating factor in our budget. 

I love Jacob's book and blog Early Retirement Extreme.  The one subject he does not deal with in detail is those who do want to own a home and have or plan to have children.  Using the strategies as a basis the plan can easily be adopted for those who do want to have a prosperous family life.  I cannot fathom what it would be like to own a home outright at age 25 but I can certainly imagine it.

We need to try and see the forest through the trees so we are able to make the best decisions for ourselves and our families.  Did I know this at age 16, 25, or even 40?  No, time, experience, prayer, and watching the daily news has shown me there is a better way than the road of the average.

Monopoly

Where did you get your personal financial education before you went out on your own?  Who taught you to make and balance a budget?  Who cautioned you about debt and encouraged you to save?

I have often asked myself this and cannot come up with a clear answer.  I do know that I was almost 30 before I started reading books on personal finance and then read as many as I could find.  That really sounds just a bit crazy because by then I had been married, divorced, had 3 children, and been in banking almost 10 years.  Of course in the process I was making money, spending money, waiting for the next check, and all the other things we do in the daily process of being an adult. 

How does one learn about personal finances?

• Example
• Experience

Help me out here.  Is it just something we are supposed to inherently know from birth?  Does it just magically appear in our brains when we turn 18? 

Oh, that's right.  We are Americans.  We learned finances from our Monopoly game.

And for those of us that were highly educated we also had the game of LIFE.  That one was more advanced and included children, college tuition, and even bankruptcy if I recall.

For those in the younger generation or who did not have someone to play the traditional games with them Scrooge McDuck in Duck Tales was the instructor.

So many of us start out thinking we know what we are doing until we totally mess it up.  The New York Times says :  Money Fights Predict Divorce Rates.   Consider that 57% of marriages that end in divorce say that it is for money reasons.

So why do we have so little training in an area that effects each and everyone of us and our children for generations to come?

Beats me...



Excerpt from In The Trenches - If kids were meant to fly.

This is one of my favorite financial topics: teaching kids about money.  They are so smart and so unencumbered by past mistakes that it is a joy to involve them in the process.  Kids are pretty much a clean slate and what is written on that slate can influence the future and help them avoid all the trial and error we as parents have endured on the road of life.  On with our story...

In The Trenches - Education

With unemployment so high right now we easily know two things:
1. Many people have a lot of time on their hands.
2. Competition for every job is fierce.

Skills, experience,  and education are the primary criteria that employers are reviewing as part of their screening process.  Even if you have all these things the going can be rough. 

Did you know that most employment agencies offer free training for many office programs?  I have been calling around and the best program I have found so far is offered by Manpower  Employment agency.  They offer up to 5,500 hours of free tutorials and online instruction.  So far I have had a harder time finding one for Quickbooks so if you know of one please let us know.  These can be done from your home,  in their office, or wherever you can find a computer to use. 

Yes, that's free.

100 Best Blog Posts for Extreme Budgeting

Online Degrees has selected and compiled the links to 100 blog posts that they have classified as the best for extreme budgeting.  While not everything will be something you'll want to try, you'll likely learn a few tips and get some advice that can help you in the long run.

The page is very well organized so you can browse for now and keep as a handy reference for later.  As the name implies they have many programs  for online learning so if you have been thinking of improving your skills or education here is another resource for doing so.

Their Extreme Budgeting categories include:

• Basics
• Creating a Budget
• Spending on a Budget
• Living Frugally
• Getting Out of Debt
• Inspiration
• Tips and Advice
• Extreme Budgeting Cautions
• Ways to Save
• Miscellaneous

With so much information available online a person can spend hours (that's part of the fun of it) and never run out of ideas.  If you are trying to maximize your time or need to make some quick changes this might be a good starting point.

http://www.onlinedegrees.net/blog/2010/100-best-blog-posts-for-extreme-budgeting/

In The Trenches - $10 Education

Not all education has to be done in the classroom.  Especially if it's something you love.  I've always been an avid fan of the library but don't have enough time to read all the books I'm interested in.  Non-fiction seems to go somewhat slower.

But I'm getting smarter now.  I've discovered books on CD.  The players can be purchased at Walmart for $10 to $15 dollars. 

Most libraries now have the online browsing feature that allows you to pick the subject and then specify CD only.  Once you've placed the request you're on your way. You can pick any subject you want, from gardening, to novels, to biology.  If you are interested in finance most of the blogs on the left have recommended reading lists to give you some ideas of titles or you could browse Amazon and then see if your library system carries a copy.

 It's great! Just choose your subject and you can become an expert in no time!